UK house prices grow at slowest rate in 18 months

UK house prices grew at its slowest rate in 18 months, according to Rics(Reuters)

The Royal Institute of Chartered Surveyors (Rics) has revealed that UK house prices grew at their slowest rate in 18 months in November, as mortgage curbing measures came into effect.

The Rics monthly house price index tumbled to +13 in November, down from +20 in October.

The group said that UK house price growth is at its lowest level since May 2013, but added that Chancellor George Osborne's property tax cuts could help boost sales.

"The stamp duty reform could reverse the softer trend in buyer enquiries that has been visible in recent months," said Simon Rubinsohn, chief economist at Rics.

According to data from the Office for National Statistics, annual house price inflation was 12.5% in England, 5.8% in Wales, 7.6% in Scotland and 10.9% in Northern Ireland.

The average UK house price in September 2014 stood at £273,000 (€342,025, $427,614) as compared to £274,000 in August.

A regional breakdown shows that the average property price in England stood at £285,000; £172,000 in Wales, £143,000 in Northern Ireland and £197,000 in Scotland.

The Bank of England (BoE) has kept UK interest rates at a record low of 0.5% since 2009.

The BoE capped mortgage lending on 1 October while the Financial Conduct Authority installed new affordability checks for homeowners to stop soaring UK house prices.

The checks are also designed to make sure that Britons are able to withstand a rise in rates after obtaining a mortgage.

However, in the Chancellor's Autumn Statement, Osborne abolished the old stamp duty system.

Stamp duty works on a "slab" basis, by which the percentage paid applies to the purchase price band. This can have a distorting effect on the housing market, because a house is very difficult to sell at prices just above each threshold, for example £250,001.

However, under the new rules, stamp duty on a property will be paid in a method comparable to the system of income tax.